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Investors prefer smallcaps over peers
Thu, 23 Sep 01:30 pm

The Indian markets continued to languish in the red during the previous two hours of trade. Currently, stocks from the healthcare and consumer durables spaces are leading the pack of gainers, while those from the realty and banking spaces are the top underperformers.

The BSE-Sensex is trading down by around 60 points (down 0.3%), while the NSE-Nifty is down by about 30 points (down 0.5%). Stocks from the mid and smallcap spaces however, seem to be finding some interest as the BSE-Midcap and smallcap indices are trading higher by about 0.1% and 0.7% respectively. The rupee is trading at 45.64 to the US dollar.

Inflation numbers for the week ended September 11 were announced recently. The fuel price index for the period remained flat at 11.48%, while food inflation stood at 15.5%. During the preceding week the food inflation figure stood at 15.1%. The increase in the same is due to higher prices of items such as condiments, spices, fish (inland) and poultry. On the other hand, prices of items such as tea, gram and jowar declined. The RBI had increased interest rates last week. However the effect of the same is likely to be seen with a lag effect. It also stated that headline inflation had stabilized, but is expect to remain above the comfortable territory for a few months. The central bank expects the wholesale price index to ease to 6% by March next year. During the month of August 2010 the figure stood at 8.5%.

Auto stocks are trading mixed with M&M and Amtek Auto trading firm while Maruti Suzuki and Hero Honda are trading weak. As per the leading market research firm JD Power, Tata Motor's car Nano, is projected to become India's second best selling model next year. This year Maruti's Alto is expected to be no. 1 while Hyundai's i10 is expected to be the second largest seller. As of now Nano's volumes are averaging close to 10,000 units a month. However, once Tata ramps up production, Nano is projected to hold the no. 2 position. With plans underway to launch diesel and automatic versions, monthly numbers of the Nano can even reach 35,000 units by 2014-15. As per the report from JD Power, the top three models by 2017 will be Alto, Nano and Wagon R.

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